BUSINESS ETHICS

Business Ethics

Business Ethics

Introduction

Nilsen shipping is a Norwegian shipping company. The company is leading provider of deep-sea transportation dry cargo in Bulk. Company is responsible for commercial, technical and crewing of a fleet trading worldwide. I was head of quality, safety and environmental department (QSE) and was to investigate various ship breaking options. I have discussed in this paper about business ethics and sustainability issues with ship-breaking in developing states and set out possible solutions, main responses and course of action. This paper also evaluates problems comparing potential with actual solutions applying the theory of Utilitarianism.

Discussion

Basic details of the case

When the financial crisis struck in 2008, the company had several older vessels that were not competitive in the market due to age, maintenance expenses, and bunker consumption. Nilsen shipping had to scrap four tankers due to overcapacity of tonnage. Following extreme options were possible:

Increase in Cost

Scrapping tankers in a developed country would cost the company a large amount to any scrapping yard.

Profitable Income

Scrapping tankers in a developing country choosing a scrapping yard that paid the largest amount per ton.

Business Ethics & Sustainability Issues

Ethical practices in business assuring highest legal and moral standards that are observing in a business relationship with people in the community. Good business ethics is effective for business in the long run. However, developing states have lower standards in legislation regarding the environment and worker rights. Ship breakers in northern Europe make 250 dollars a day. In India, he may earn 6 dollars a day (The News, 2009). They start at 1-2 dollars a day which explain ship breaking taking place in developing states (Srinivas, 2010). Ship owner have own profits in mind with ship breaking and take advantage of developing states. Most ship owners have concerns doing so, but the fact is that they may sell the vessels instead of paying for scrapping. It makes the decision often to be a pure business decision and less focus on the ethical side of it. It is to what extent the ship owners are willing to sacrifice developing states environment and workers that increase the dilemma.

In last four decades, public interest has increased rapidly. Public media have great interest with ship breaking and there are growing concerns from customers as ship breaking in developed states may be recognized as bad business ethics which in turn cause themselves negative publicity. The major concern was exploitation of human beings and spoiling their local communities with toxic waste. Child labor, absence of safety for workers, or ignoring environment friendly practice was other serious issues that highlighted by public media.

In past, ships either sunk or taken apart in the country where they built. The less environment friendly ship breaking in developing states is a great concern for developed states, but they have failed to take action and do not have enough ship breaking options in their own countries. Various reasons of ship breaking may be Amax age set by customers or new domestic/international regulations. Maintenance costs naturally increased during the vessels life time ...